CSR, what CSR? “Good” corporates more likely to go bad finds study

Businesses which shout the loudest about being socially responsible could be more likely to end up doing something irresponsible, suggests a recent study.

Adopting the idea of “CSR” or corporate social responsibility is common practice for big firms these days but an article published in the journal Personnel Psychology claims this could lead to complacency.

Researchers Margaret Ormiston and Elaine Chong looked at 49 companies in the Fortune 500 for their PhD paper. They found for every five positive actions over one period of time, there was a negative action in the following time period.

Good behaviour such as donating more than 1.5% of profits to a community while negative actions included taking over facilities or doing something in the area which took away the value of properties.

A perpetrator isn’t an “evil person” but may feel like they have clocked up “moral credits” which give them license for some irresponsibility, according to Dr Ormiston, who is now assistant professor of organisational behaviour at London Business School.

The study was informed by existing, experimental research in labs at Toronto University which found people buying “green” products went on to “cheat and lie” to get more money, she said.

When a business has a successful year for corporate do-gooding, that’s when it should be most alert to slip ups, said Dr Ormiston.

She told ELN: “I think that all companies need to pay attention to the months after they’ve had a good year of CSR, just when people are patting themselves on the back, they shouldn’t rest on their laurels. It’s dangerous to switch off.”

She compared it to over-eating at Christmas: “You see it in the health domain. You’ve been good all year, now you can indulge a bit.”

Carbon credits are a good example of when businesses should be wary of this, she added.